“Whether the market goes up or down, the ability to reach client goals is the most important objective for us to reach,” Crowell says. “It’s not about outperforming the market year over year, or worrying about a down year in the market. Clients need to be more focused on whether they’re going to be able to access cash when they need it.”
Advisors must reframe the discussion about risk, Crowell says, to make it more relevant to the client.
Advisors who use technology to connect with clients may be at a disadvantage, argues White.
“If the market’s crashing, it’s hard to bring forward all these intangibles unless you have a personal, face-to-face connection with all the parties in a household,” says White. “Connecting with FaceTime and HangOut is useful, to a point, but you’re only talking with the person that you’ve been led to believe is the financial decision-maker. Household decisions are seldom made by one person.”
With growing sums of assets managed by technology, too many investors have no emotional backstop for when things go wrong, says White. Even as robo-advisors become more sophisticated, they do not have the tools to prepare clients for corrections.
Hybridizing technology with call centers staffed with planners may also fall short, says White, as call centers don’t establish a long-term relationship with the client and aren’t as effective at building trust.
“There’s no way you can teach a system to pick up on the nuances of a client adequately,” says White. “When the next crisis occurs, it will not look like the last crisis, so training AI to respond as if it were the last crisis will not do the trick for most investors, because it will not respond knowledgeably.”